902 9th St SW

Perham, MN 56573

$285,000D-

2 bd · 2.0 ba · 2,904 sqft · Built 2013 · Townhouse · Pending · 183 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,151/mo
• Mortgage (P&I): −$1,495
• Tax + insurance: −$315
• HOA: −$0
• Vac / Maint / Mgmt: −$452
• Net cashflow: $-111/mo
• Annual: $-1,331/yr
• Cap rate: 5.83%
• Cash-on-cash: -1.67%
• DSCR: 0.93
• 1% rule: 0.75%
• Cash to close: $79,800

Investor read

• This is a 2-bed/2.0-bath townhouse listed at $285k.
• At list price, monthly cash flow is $-111 ($-1k/yr) — negative.
• To cash-flow at today's rent, offer at most $265k (6.9% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $215k (24.5% below list).
• It's been on market 183 days — a 12% lower offer ($251k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $215k (24.5% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $9k of value loss. Plan a longer hold.
• Location reads 70/100 on livability (#328 in MN) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, health & safety A+; Watch: amenities F, commute F, employment F.
• Perham-Dent Public School District (town): math 45% / reading 57% proficiency, ranked #110 of 301 in MN (top 36%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Market conditions: 92 active listings in the ZIP; 140 units permitted in Otter Tail County in 2024 (48 in 5+ unit buildings).
• 4 sale attempts since 12y ago with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• Current owner paid $158k; list at $285k implies a 80% gain — meaningful room to come down on a strong offer.

Questions for listing agent

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• It's been on market 183 days. Have you received any prior offers? Is the seller open to a 25% concession, seller financing, or rate buy-down credit?
• Why hasn't it sold? Are there any deal-killer items the seller is aware of (foundation, flood, title, zoning, code violations)?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are B-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?
• What's the average days-on-market for RENTAL listings here right now (not sales)? A rising rental-DOM trend means longer vacancies and softer asking-rent achievability than the comps imply.
• What's the recent tenant-quality profile in this submarket — average credit score on applications, eviction rate, late-payment / NSF rate, and stable-employment percentage? A property-management company in the area should have these aggregated.